Social Security and Government Pensions Case Studies

Thailand's Government Pension Fund

Citi provides comprehensive local payment management and reporting solutions to Thailand's largest institutional pension fund and its client base of over 1 million members

Thailand's Government Pension Fund (GPF) is the largest pension fund provider and institutional investor in the country, covering over 1 million members and currently holding assets under management of over USD14 billion.

The GPF's objective is to ensure member benefits upon retirement, promote saving for members and provide members with other welfare and benefits.

The GPF operates with two distinct member categories; contributing and non-contributing members. Contributing members have to contribute 3 percent of their salary on a monthly basis. Employers are required to match this contribution and provide an additional 2 percent for post-reform compensations. For non-contributing members, employers provide post-reform compensations at 2 percent of monthly salary.

High payment volumes and distinct membership categories has led the GPF to experience numerous challenges when making local payments to beneficiaries.

Traditionally, the GPF used an array of banking partners to complete local payments throughout Thailand, but has repeatedly found the process time consuming and costly.

To streamline the management of local payments, the GPF issued a request for proposal to banks that could effectively streamline local payments. The successful bank would also be charged with providing an array of payment solutions for the GPF's members, vendors, and third parties.

Specifically, the GPF needed an urgent, streamlined solution to be implemented within 90 days, one that would have a minimal impact on its current processes. The solution needed to have a high level of security that could handle high payment volumes and provide detailed reports for reconciliation purposes.

After completing a thorough due diligence process, Citi was mandated by the GPF to provide a comprehensive cash management solution that satisfied its complex requirements. For the GPF, Citi's tailored solution now allows for streamlined payments to beneficiaries across Thailand and an array of features that reduce manual processes, promotes efficiency, and improves member satisfaction.

By utilizing Citi's solution, the GPF's entire check disbursements program is completely outsourced to Citi. Through its PayLink Check solution, Citi issues cashier checks and distributes directly to the GPF's beneficiaries. For paperless transfers between the GPF and its beneficiaries across Thailand, Citi has provided PayLink Direct (ACH), and BahtNet, a solution that allows for Real Time Gross Settlement (RTGS) payments, satisfying the client's high-volume payment requirements. In addition, Citi implemented customized reporting structures across various payment channels and provided innovative beneficiary advice to the GPF on fax, email, and SMS.

The solution also satisfied the GPF's requirements for direct money orders, which utilize Citi's existing partnership with Thailand Post. Citi now issues money orders and mails directly to the GPF's beneficiaries.

Technology-wise, the GPF now uses CitiDirect® Online Banking, which provides direct access to a full suite of domestic payment options and initiates transactions online through a single platform. CitiDirect allows for the GPF to process high-volume payments to multiple beneficiaries in a secure manner.

Additionally, Citi's document management solution provides the GPF with scanned payment advices that are indexed and sent back to the GPF for reference. This element of the solution helped the GPF improve efficiency while eliminating its manual document-filing process.

The impact of Citi's local cash payment management solution for the GPF has been significant. Citi's customized solutions have enabled the GPF to execute high-volume payments in a timely and convenient manner by improving the payment process automation and control. By outsourcing non-core tasks to Citi, including check disbursements, the GPF has benefited from a reduced administrative workload, which has allowed it to focus more on its objective to satisfy members with superior returns, services, and welfares.

Utilizing Citi's innovative payment reporting solutions and document management tools, the GPF greatly enhanced visibility and control in reporting, and other beneficiary advice improved communications with vendors and beneficiaries, resulting in a high level of satisfaction among members and vendors.

The GPF has expressed great satisfaction with the successful implementation of Citi's local payments, which has gone beyond its complex requirements.